Transcription
EQUI-VEST (series 201)and EQUI-VEST Strategies (series 900 &901) Variable DeferredAnnuities(Also includes EQUI-VEST series 200 specialcases and EQUI-VEST Vantage) 2014 AXA Equitable Life Insurance Company (AXA Equitable), N.Y., N.Y. - All Rights ReservedSales Support – Training Strategy and ContentFor Financial Professional use only. Not to be used with or distributed to the general public.IU-97357 (10/14)(exp. 10/16)Use the navigation buttons located below to advance through this course.
ObjectivesAfter completing this course you will be able to: Identify who is eligible for EQUI-VEST Series 201/900/901 products Explain the investment options available with EQUI-VEST Series 201/900/901 products Describe product features of EQUI-VEST Series 201/900/901 products Recognize charges and expenses associated with EQUI-VEST Series 201/900/901productsAfter reviewing the course content you will be required to complete an assessment with aminimum score of 70% in order get completion credit for this course.2IU-97357 (10/14)(exp. 10/16)For Financial Professional use only. Not to be used with or distributed to the general public.
Overview EQUI-VEST (series 201) and EQUI-VEST StrategiesSM (series 900 & 901) are variabledeferred annuity contracts issued by AXA Equitable Life Insurance Company. The contracts provide the opportunity for accumulation of retirement savings with growthpotential and income. The contracts offer death benefit protection and a number of payout options. Contributions are invested on a tax deferred basis into one or more of the variableinvestment options, the guaranteed interest option, the Structured Investment Option, and, ifavailable, the Fixed Maturity Options. This document provides information on EQUI-VEST (series 201) and EQUI-VEST StrategiesSM (series 900 & 901) contracts, which are available as funding vehicles for 403(b)Tax-Sheltered Annuity (TSA), 457(b) Employee Deferred Compensation (EDC) or 401(a)[available under EQUI-VEST StrategiesSM (series 901) only] plans. EQUI-VEST StrategiesSM (series 901) is available through a request for proposal (RFP)only.3IU-97357 (10/14)(exp. 10/16)For Financial Professional use only. Not to be used with or distributed to the general public.
Overview (continued) EQUI-VEST (series 201) 403(b) TSA contracts are individual contracts owned by theparticipant in the employer’s plan. EQUI-VEST (series 201) 457(b) EDC contracts are owned by the plan trustee or employer.Certain rights under the contract are exercised by participants in the employer’s plan. EQUI-VEST StrategiesSM (series 900 & 901) is a group contract under which either the plantrustee or the employer will be the contract holder. Certain rights under the contract areexercised by participants in the employer’s plan. These rights are summarized in aparticipation certificate provided to each participant. EQUI-VEST StrategiesSM (series 900) is no longer available for new RFPs. For employers that established an EQUI-VEST StrategiesSM (series 900) unit, newemployees will continue to be issued EQUI-VEST StrategiesSM (series 900) certificates. In this document, all references to contract will include certificate when discussing EQUIVEST Strategies. References to contract date and contract year will include participationdate and participation year when discussing EQUI-VEST Strategies.NOTE: Some features and benefits may not be available in all jurisdictions. Please refer to theImportant Information slide later in this course, product prospectus and additional salesmaterials provided by AXA Equitable Life Insurance Company or contact us.4IU-97357 (10/14)(exp. 10/16)For Financial Professional use only. Not to be used with or distributed to the general public.
Eligible EmployersUnder EQUI-VEST (series 201): 403(b) TSA: Public schools, college and universities. 403(b) TSA: Hospitals and 501(c)(3) non-profit organizations – new participants inexisting units only.1 457(b) EDC: Public schools (only if paired with a TSA unit).2 457(b) EDC: State, county and local government agencies – new participants inexisting units only.1,2 457(b) EDC (Top Hat): Tax-exempt organizations.2Under EQUI-VEST StrategiesSM (series 900 & 901): 403(b) TSA: Public schools, colleges, universities, hospitals and 501(c)(3) non-profitorganizations.3 457(b) EDC: Public schools (only if paired with a TSA unit).2,3 401(a) under series 901: Colleges and universities1 - New employer units can no longer be established.2 - Not available for 457(b) plans in New York.3 - EQUI-VEST Strategies (series 900) is no longer available for new employer units. Available for newparticipants in existing units only.5IU-97357 (10/14)(exp. 10/16)For Financial Professional use only. Not to be used with or distributed to the general public.
Investment OptionsStructured Investment Option (SIO) – Permits participants to invest in one or moresegments, each of which provides performance tied to the performance of an Index (excludingdividends) up to a cap (Performance Cap Rate) with a downside buffer (Segment Buffer): S&P 500 Price Return Index: one year with a downside buffer of -10%; three years witha downside buffer of -20% and five years with a downside buffer of -20% Russell 2000 Price Return Index: one year with a downside buffer of -10%; threeyears with a downside buffer of -20% and five years with a downside buffer of -20% MSCI EAFE Price Return Index: one year with a downside buffer of -10%On the Segment Maturity Date, a Segment Rate of Return based on the performance of theindex is applied to the Segment Investment. Amounts are placed in a Segment HoldingAccount (which is part of the EQ/Money Market variable investment option) before they areswept into a Segment on the Start Date. Each Segment has a 1,000 minimum investmentrequirement. SIO is subject to state approval, please check to be sure it is available in yourstate of sale.While that SIO offers protection from some downside risk, if the negative return for anySegment at maturity exceeds the Segment Buffer, there is a risk of a substantial loss of yourprincipal.6IU-97357 (10/14)(exp. 10/16)For Financial Professional use only. Not to be used with or distributed to the general public.
Investment Options (continued)Variable Investment Options – Contributions can be allocated to any of the variableinvestment options under the contract. Each variable investment option invests in acorresponding securities portfolio of EQ Advisors Trust, AXA Premier VIP Trust or unaffiliatedVariable Insurance Trusts. The contracts offer variable investment options including: Asset Allocation Target Date Allocation A wide range of variable investment options focused on specific asset classes. Under EQUI-VEST StrategiesSM (series 900 & 901), employers can also decide to limitthe number of variable investment options available under the contract.7IU-97357 (10/14)(exp. 10/16)For Financial Professional use only. Not to be used with or distributed to the general public.
Investment Options (continued) Guaranteed Interest Option (GIO) – offers an initial guaranteed rate of interest andguaranteed renewal rates that are declared monthly. See the Features and Benefitsattachment for GIO restrictions. There are three levels of interest in effect at the same time inthe GIO:(1) the minimum interest rate guaranteed over the life of the contract,(2) the annual minimum guaranteed interest rate for the calendar year, and(3) the current interest rate. The lifetime minimum guaranteed interest rate can range from 1.0% to 3.0% depending onthe state and the year in which the contract is issued. The annual minimum guaranteedinterest rate will never be less than the lifetime minimum guaranteed interest rate. Thecurrent interest rate will never be less than the annual minimum guaranteed rate. Under EQUI-VEST (series 201) and EQUI-VEST Strategies (series 901) – No more than25% of any contribution can be allocated to the GIO. Also, AXA Equitable will not processany transfer requests that would result in more than 25% of a participant’s account value inthe GIO. These allocation and transfer restrictions are currently waived in all states. AXAEquitable will notify participants 45 days in advance if these restrictions are re-imposed. Fixed Maturity Options (FMOs) under EQUI-VEST Strategies (series 900) – offer maturitiesranging from one to ten years. Each FMO offers a guaranteed interest rate when held tomaturity. Withdrawals or transfers from FMOs prior to maturity may be subject to marketvalue adjustments, which may increase or decrease the account value.8IU-97357 (10/14)(exp. 10/16)For Financial Professional use only. Not to be used with or distributed to the general public.
Investment Options (continued) Transfers can be made among investment options at anytime, without charge. The amounttransferred must be at least 300, or if less, the entire amount in the investment option. Once amounts have been transferred from the Segment Holding Account into a segment,transfers into or out of that segment will not be permitted prior to the Segment Maturity Date. Investment Method – There are two methods available for selecting investment options to beavailable under the contract: Maximum investment option choice – Under this method, contributions and transfers maybe allocated to all available investment options. Transfers among investment options maybe made at any time. However, there will be restrictions on the amount that can betransferred out of the GIO. Maximum transfer flexibility – Under this method, contributions and transfers can be madeto the GIO and equity investment options. No transfer restrictions will apply. Restrictions on transfers out of the GIO are currently waived. Participants will be given 45days advance notice if the transfer restrictions are re-imposed.9IU-97357 (10/14)(exp. 10/16)For Financial Professional use only. Not to be used with or distributed to the general public.
Investment Options (continued)Automatic Transfer OptionsDollar Cost Averaging Programs: Investment Simplifier programs – This optional feature is a form of dollar cost averagingwhere interest (or a specified dollar amount) is automatically transferred from the GIO intoone or more of the variable investment options available under the contract. Fixed Dollar Option – A fixed dollar amount is transferred on a monthly basis from the GIOinto the variable investment options. A minimum balance of 5,000 must be in the GIO toelect this option. Interest Sweep Option – Each month, the interest from the GIO will be swept into thevariable investment options. A minimum balance of 7,500 must be maintained in the GIOunder this option. Account for Special Dollar Cost Averaging (SDCA) (available for EQUI-VEST series 201 andEQUI-VEST Strategies 901) – offers an enhanced interest rate for direct rollover or directtransfer funds in the first five contract years only. Time periods available are 3, 6 or 12months with different interest rates, set monthly. Only one time period can be in effect at anytime, and once selected, cannot be changed. Transfers from the SDCA to the GIO are notpermitted.10 IU-97357 (10/14)(exp. 10/16)For Financial Professional use only. Not to be used with or distributed to the general public.
Investment Options (continued) Account value rebalancing* – automatically rebalances the account value to specifiedpercentages on a quarterly, semiannual or annual basis.There are two options available: Option I – only variable investment options, which must total at least 5,000. Option II – variable investment options and the GIO, which together must total at least 5,000. The Structured Investment Option and Fixed Maturity Options cannot be included in therebalancing program.*Not available for the Personal Income Benefit (PIB) variable investment options.11IU-97357 (10/14)(exp. 10/16)For Financial Professional use only. Not to be used with or distributed to the general public.
Access to the Value in the ContractLoans¹ If permitted under the employer’s plan, loans offer an alternative way to access aparticipant’s account value. Only one outstanding loan is permitted at any time. Subject to state availability, under EQUI-VEST StrategiesSM (series 901) loans are treatedas withdrawals. More than one loan may be outstanding at any time. There is a loan set upcharge and a loan fee for each loan outstanding (see the Charges and Expenses table inthis course for the charges that apply).Withdrawals¹,² Up to 10% of the account value is available for withdrawal without incurring a withdrawalcharge. This is the “free withdrawal amount.” There are several ways to withdraw money from the contract (subject to any restrictions): Partial withdrawals – may be taken at any time before annuity payments begin. Theminimum amount for each partial withdrawal is 300.1 – Withdrawals (except on the Segment Maturity Date) and loans must be taken from all other investmentoptions before they can be taken from the segment(s) .2 - Withdrawals are subject to ordinary income tax, if made prior to age 59 ½, may be subject to an additional10% federal income tax penalty (not applicable to EDC).12IU-97357 (10/14)(exp. 10/16)For Financial Professional use only. Not to be used with or distributed to the general public.
Access to the Value in the Contract(continued) Systematic withdrawals – Systematic withdrawals may be taken on a monthly orquarterly basis. The minimum amount for each withdrawal is 250. The participantmay withdraw either the interest credited in the GIO (a minimum 20,000 accountvalue must be maintained in the GIO) or a fixed-dollar amount from either thevariable investment options or the GIO (no minimum account value is required to bemaintained). Lifetime minimum distribution withdrawals – The required minimum distribution(RMD) automatic withdrawal option is available to help meet the lifetime requiredminimum distributions under federal income tax rules. This option may be elected inthe year in which the participant reaches age 70 ½ or in any later year, subject to theterms of the employer’s plan. The account value under the contract must be at least 2,000 to elect this option. The minimum amount for each withdrawal is 300 or ifless, the account value. Any withdrawal request that leaves an account value of less than 500 in the contract,may be treated as a request to surrender the contract for its cash value. Contract Surrender – The contract may be surrendered at any time to receive the cashvalue.13IU-97357 (10/14)(exp. 10/16)For Financial Professional use only. Not to be used with or distributed to the general public.
Access to the Value in the Contract(continued) Annuity Payout Options: Fixed Annuity Payout Options Life annuity Life annuity with period certain Life annuity with refund certain Period certain annuity Variable Immediate Annuity Payout Options: Life annuity (not available in New York) Life annuity with period certain The date annuity payments are to begin may not be earlier than 13 months from thecontract date or later than the maximum maturity age, which is generally age 95.14IU-97357 (10/14)(exp. 10/16)For Financial Professional use only. Not to be used with or distributed to the general public.
Personal Income Benefit (PIB)PIB was added as a feature on the EQUI-VEST series 201 and EQUI-VEST StrategiesSMseries 900 and 901 contracts (subject to plan and state approval).The PIB feature guarantees that for an additional charge, participants can elect to takewithdrawals (Guaranteed Annual Withdrawal Amount or GAWA) during the participant’slifetime (or the lifetime of the participant and the participant’s spouse if joint life is elected).GAWA payments will continue even if the PIB account value falls to zero, unless it does sobecause of a withdrawal that exceeds the GAWA in any contract year. GAWA paymentsmay also be reduced because of early withdrawals. See the Charges and Expenses tablein this course for the charge that applies. PIB is elected by allocating contributions to the PIB variable investment options. Onceamounts are allocated to the PIB variable investment options, these amounts cannot betransferred out, except under a one time transfer out feature allowing the participant totransfer the total account value out of the PIB variable investment options, cancelling thebenefit. Once cancelled, it cannot be re-activated. The PIB variable investment Options are: AXA Moderate Growth Strategy;EQ/AllianceBernstein Dynamic Wealth Strategies; AXA Balanced Strategy; AXAConservative Growth Strategy; and AXA Conservative Strategy. These options are alsoavailable as non-PIB variable investment options.15IU-97357 (10/14)(exp. 10/16)For Financial Professional use only. Not to be used with or distributed to the general public.
Personal Income Benefit (PIB)(continued) The PIB variable investment options are not listed on the application. PIB is selected bycompleting the “Selection of the Personal Income Benefit (PIB)” Form. The participant must be at least age 45 and not older than age 85 in order to allocateamounts to the PIB variable investment options and activate the benefit. Allocations to the PIB variable investment options may be from contributions or transfersfrom non-PIB investment options. The initial amount allocated to the PIB variableinvestment options must be at least 1,000. Once amounts are allocated to the PIB variable investment options, the charge for thePIB will begin to be assessed (see Charges and Expenses).16IU-97357 (10/14)(exp. 10/16)For Financial Professional use only. Not to be used with or distributed to the general public.
Personal Income Benefit (PIB)(continued) GAWA payments are calculated based on contributions to the PIB variable investmentoptions, transfers from the non-PIB investment options to the PIB variable investmentoptions and any Ratchet Increases. The amounts below will be added together todetermine the total GAWA:1. The sum of contributions that are periodically remitted to the PIB variableinvestment options, multiplied by the quarterly Guaranteed Withdrawal Rate(GWR) in effect when each contribution is received, plus2. The sum of (i) transfers from non-PIB investment options to the PIB variableinvestment options and (ii) contributions made in a lump sum (including, but notlimited to, amounts that apply to contract exchanges, direct transfers from otherfunding vehicles under the plan, and rollovers) that are allocated to the PIBvariable investment options, multiplied by the Guaranteed Transfer WithdrawalRate (GTWR) in effect at the time of the transfer or contribution, plus3. The sum of any Ratchet Increase. GWR – The GWR is calculated using a “Ten-Year Treasuries Formula Rate”. We thenadd a percentage that ranges from 0.25% to 1.0% based on the participant’s age at thebeginning of the calendar quarter. The percentage is 1.0% if the participant is between the ages of 45 and 50, anddeclines by 0.05% each year until it reaches 0.25% at age 65. The GWR is currently set at the beginning of each calendar quarter.17IU-97357 (10/14)(exp. 10/16)For Financial Professional use only. Not to be used with or distributed to the general public.
Personal Income Benefit (PIB)(continued) GTWR – The GTWR is set at AXA Equitable’s discretion and will never be less than2.5%. The GTWR is set at the beginning of each calendar month. The Ratchet Base – equals the amounts allocated or transferred to the PIB variableinvestment options; plus it is increased on each contract date anniversary to equal thePIB account value if it is higher than the immediately preceding Ratchet Base. TheRatchet Base is adjusted for loans, early and excess withdrawals and refund of excesscontributions from the PIB account value. Ratchet Increase – When the Ratchet Base is increased, the Ratchet Amount ismultiplied by a fraction equ
IU-97357 (10/14)(exp. 10/16) For Financial Professional use only.Not to be used with or distributed to the general public. Overview EQUI-VEST (series 201) and EQUI-VEST StrategiesSM (series 900 & 901) are variable deferred annuity contracts issued by AXA Equitable Life Insurance Company.File Size: 432KB
